Emirates NBD-Egypt aims to increase the size of loans channeled to small- and medium-sized enterprises (SMEs) to 10% of the total loan portfolio at the bank by the end of 2017 and to 20% by the end of 2019, according to bank officials.
In the presence of deputy managing director and chief risk officer Sahar El-Damati, head of retail banking and wealth management Frederic de Melker, and head of the SMEs department Hany El-Shamy, the bank announced on Tuesday the launch of a specialised unit for financing SMEs.
During the press conference, officials said that launching the unit and aiming for further expansion in supporting SMEs comes as part of the bank’s strategy to implement the initiative launched by the Central Bank of Egypt (CBE) earlier this year, which targets supporting SMEs and securing facilitated expansion for these promising projects.
According to El-Damati, Emirates NBD-Egypt has been working to meet the demands of its clients of all segments, both individuals and companies, since it entered the market in June 2013.
She said that the launch of a special unit dedicated to supporting SMEs comes to complete the picture in order to support, advise, and provide education for one of the most important segments in order to grow Egypt’s economy.
She added that the bank will offer financial and technical support to existing SMEs to help them expand, and would also work to attract new enterprises, even if they require more effort.
According to de Melker, the new unit will facilitate matters for SME customers and help complete funding procedures as easily and quickly as possible.
He added that it also provides advice and consultancies required for the success of these enterprises, which will help in increasing the number of the bank’s SME customers.
He noted that Emirates NBD began funding SMEs conservatively, but will now increase its investments channeled for the sector, after it gathered relevant knowledge about it.
Moreover, he pointed out that the bank has been conducting a study over the past few months to review the areas in which it will expand. He said that the bank will focus on opening new branches in industrial areas to provide banking services to companies located there.
De Melker expects three new branches to open within a few months.
El-Shamy stated said that the bank has been implementing an expansion strategy for SME financing since the beginning of the second half of 2016.
He explained that the bank has developed its SME department and updated credit policies, procedures, and internal systems to suit SMEs. Moreover, he noted that the bank has set a plan to gradually raise its SME portfolio within the coming three years, targeting 10% of the bank’s total portfolio by the end of 2017 and 20% by the end of 2019, according to the CBE’s regulations. He was in charge of the development of the department responsible for financing these projects and the modernisation of credit policies, procedures and internal systems to fit their nature.
Emirates NBD’s strategy has an expansion plan to increase the number of its branches to 100 by 2020 to reach all segments of SME customers nationwide, in addition to raising the number of employees in the SME department from 70 to 150 in the coming few years, according to El-Shamy.
He added that the bank has already boosted the SME unit by appointing 30 specialists in 2016, increasing the number of SME employees to 100. “Moreover, Emirates NBD-Egypt launched a database to classify customers according to the CBE’s decree in order to provide accurate information about each customer,” he said.
He pointed out that, as part of Emirates NBD-Egypt’s ongoing efforts to support the SME sector, the bank has launched a specialised unit for credit marketing, along with a risk and credit rating unit to provide SMEs with funding and banking services.
“Furthermore, Emirates NBD-Egypt has set up a customer service unit to meet the needs of SMEs, as well as another unit for foreign trade, focusing on industrial companies manufacturing intermediate components which shore up industries and enterprises that pursue exports as part of the bank’s interest in contributing to the nation’s economic growth,” he added.
The bank has also laid out a plan to train and develop the skills and expertise of the new unit’s employees. All credit officials and branch managers have already participated in intensive credit courses specialised in SMEs so that the whole team becomes specialised and fully aware of this sector’s requirements and risks. Therefore, all credit officials become capable of granting good credit and following up on its continuity and quality. The bank is also preparing to launch a call centre service for SME customers in 2016 to answer all their inquiries, according to El-Shamy.
He added that Emirates NBD-Egypt additionally seeks to increase its investments in this promising sector through providing SMEs with various services for boosting production, achieving sustainable development, creating thousands of job opportunities, and supporting the growth of the national economy.
He pointed out that the bank will initially focus on SMEs working in the industrial and manufacturing sectors, especially projects that contribute to increasing exports, before it begins financing other projects.
He noted that the bank will not finance microenterprises now, considering their high risk nature. The bank is also waiting for another initiative by the CBE for financing projects of sales amounting to EGP 1m, which are not included in the CBE’s first initiative.
Emirates NBD-Egypt employs more than 1,800 employees. The bank has over 70 branches, seven corporate banking units, and more than 180 ATMs covering high-populated areas in Greater Cairo, the Delta, Upper Egypt, Sinai, and governorate of the Red Sea.
According to the bank’s latest data, net profits during the first nine months of 2016 increased by 24% to register EGP 748m, compared to EGP 602.7m by the third quarter of 2015. Revenues rose to EGP 1.7bn by the end of September 2016.
The rise in profits was due to a 20% increase in total assets during the first nine months of this year, to reach EGP 38.5bn at the end of September 2016, an increase of EGP 6.5bn from December 2015, which recorded EGP 32bn.
The bank’s loan portfolio increased by 33% to EGP 13.7bn at the end of September, including EGP 3.8bn in corporate loans. Deposits also rose by about 15% to register EGP 29bn, increasing by EGP 4bn in the same period.